Youngstown to pay $63,000 to a company that operated on city-owned land rent-free for seven years

The city agreed to give about $63,000 to a company that operated a gravel-making facility on city-owned property without a lease or paying rent the past seven years.

The payment, approved Friday by the board of control, is for about 15,000 tons of processed gravel, at a cost of about $120,000, to A.P. O’Horo, offset by the company’s $40,000 purchase of a four-acre parcel owned by the city and $17,000 to settle the rent issue.

The company and city agreed on $17,000 for rent for O’Horo’s city-owned property on Albert Street after negotiations, said Mayor Charles Sammarone, board of control chairman.

“There was nothing in writing; that was the problem,” he said about the lack of a lease. “There was no documentation and no rent.”

The $17,000 payment for the 14.7-acre parcel on Albert Street works out to about $2,400 a year.

Seven years ago, the city’s economic development office found the Albert Street site for O’Horo without signing a lease or collecting rent from the company, city officials say.

O’Horo crushed construction material, including concrete, at the industrial aggregate processing location. That violates the city’s zoning code, and has been a source of complaints from neighbors, Sammarone said.

The mayor said he learned of the various problems about a year ago, and stopped the company from continuing to process aggregate there.

When asked about the time it took to discover the various problems, Sammarone said: “We’re good at going from A to R, but we’re not good going from A to Z. We’ve got to learn to go from A to Z and close things.”

O’Horo has about 15,000 tons of gravel — a survey by a third-party will determine the exact amount — and is selling it to the city for $8 a ton.

The material is worth $10 to $12 a ton, so the city is getting a good deal on it, said Charles Shasho, deputy director of public works.

O’Horo will pay $40,000 to the city for four acres at the former YBM Corp. site on Logan Avenue and Hubbard Road. It’s been vacant since 1989.

O’Horo, possibly with the assistance of the city, will remove about 15,000 tons of unprocessed aggregate from the Albert Street location by the end of the month, Sammarone said.

The board of control also approved a lawsuit settlement with the Corrections Corp. of America, which runs the Northeast Ohio Correctional Center, a private prison on the city’s East Side, over an inmate tax.

The city had a tentative agreement with CCA in July that is settled with the board’s vote.

The tentative deal called for CCA to pay $300,000 a year to the city, beginning in January.

After some further negotiations, the fee remains, with CCA paying it annually Jan. 15. But beginning in 2015, the fee would be reduced if the private prison loses inmates.

The prison houses about 2,200 inmates, said city Law Director Anthony Farris.

About 75 percent are illegal immigrants convicted of felonies and held there through a contract with the U.S. Bureau of Prisons, and the rest are U.S. Marshals Service prisoners being held pending trial.

CCA officials have expressed concern the bureau could consolidate its contract with a Pennsylvania facility. Its BOP contract for the Youngstown prison on Hubbard Road expires May 31, 2015.

If the average daily population, beginning in 2015, is less than 1,250 prisoners, CCA would get half of the $300,000 annual fee returned. If it goes below 750, CCA would get a full refund from the city.

The $300,000 annual payment “is going to be very helpful to the city in the future,” Sammarone said.

The city enacted a $1-per-prisoner, per-day tax in December 2009 on the private prison. The 7th District Court of Appeals ruled in June in favor of CCA, which opposed the tax, overturning a Mahoning County Common Pleas Court judge’s decision supporting the city.